Lunchtime Links 10-8

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Caveat Emptor–Treasury hails milestone in home loan modifications (NYT) The milestone is that 500,000 mortgage modifications have been started. But that’s not a very big number and it doesn’t mean that many will actually end up in a modification. And relatively few involve principal reductions, which is what’s necessary for home prices to find a stable floor. That can happen via foreclosure, short sale or outright principal forgiveness. But someone will eventually have to recognize the loss due to the declining value of collateral.